ECB's Coeure: Eurozone Firms Risk Payment Disruptions On SEPA Migration
Eurozone firms that are delaying the changeover to a new payment system risk disruptions, European Central Bank Executive Board member Benoit Coeure said Thursday.
The deadline for euro area countries to migrate to the Single Euro Payments Area (SEPA) credit transfer and direct debit schemes is set at February 1, 2014. The SEPA initiative aims to overcome technical, legal and market barriers between countries in order to create a single market for retail payments in euro.
Thirty-three countries in Europe will participate in SEPA. With only 100 days left to go, the changeover process is now entering a critical phase, the central bank said.
In its second report on the SEPA migration process, released on Thursday, the ECB said that many key stakeholders have decided to migrate only in the last quarter of 2013, or even later.
This approach generates operational risks and limits the ability to tackle any issues or unexpected developments that might arise during the changeover period, the central bank cautioned.
"I have said this before and will repeat it: everybody has to be ready on 1 February 2014 or risk disruptions in their individual handling of payment orders," Coeure said.
The ECB report pointed out some of the risks posed by a "big bang" late migration that include capacity issues and bottlenecks on the side of the providers and software vendors at the end of the year. Further, end users may find themselves short of time to adapt to the payment service providers' new standards as well as to test their own systems sufficiently, the report said.
The migration to the SEPA credit transfer scheme is progressing fell, the ECB report said. A few countries in the euro area have already completed the process, while many others are progressing at a swift pace, it added. However, many businesses have delayed the switch to the SEPA direct debt scheme till the last few months before the deadline.
"A successful migration will require considerable effort, so it is important to further strengthen communication and cooperation among key stakeholders and competent authorities at the national level", Coeure said.
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